Haidilao, China’s biggest hotpot restaurant chain, has lined up US$375 million from five cornerstone investors including Hillhouse Capital and Morgan Stanley Investment Management for its Hong Kong initial public offering, which is expected to raise as much as HK$75.7 billion (US$963 million).

The Beijing-based firm plans to issue 424.5 million shares at a price range between HK$14.8 and HK$17.8, according to a term sheet on the deal obtained by the Post.

At the indicative range, the company has an implied valuation of between US$10 billion to US$12 billion.

Among the five cornerstone investors, Hillhouse Capital and Greenwoods Asset Management have committed US$90 million respectively. Morgan Stanley Investment Management and Snow Lake Capital will also each invest US$80 million, while Ward Ferry will take a stake worth US$35 million.

Institutional investors will account for 91 per cent of the available shares, while the remainder will be allocated to the public.

Institutional investors can apply for the shares from Monday, whereas the retail portion will be opened to order taking from Wednesday.

Trading in the shares is expected to debut on September 26.

Funds raised from the IPO would be used to repay debt, finance expansion, and develop new technology and projects to enhance food safety and the customer experience, according to the company prospectus released on Sunday.

Haidilao, which owns 362 restaurants, has expanded its operations rapidly to cater to a growing middle class population whose consumption is considered an integral part of the country’s new economy sector.

The restaurant chain generated first-half revenue of 7.3 billion yuan (US$1 billion), up 54.4 per cent on year, its listing prospectus showed. Net profit increased 17 per cent to 647 million yuan during the six month period.

Haidilao’s IPO has arrived during a sluggish period for the stock market.